Soundwave, I highly doubt that by drastic changes, Iwata ment exiting the console business. He more then likely ment a drastic changes in terms of marketing strategy, software appeal and most probably start thinking (like you said) of making an SKU without the gamepad.
Predictions for LT console sales:
PS4: 120M
XB1: 70M
WiiU: 14M
3DS: 60M
Vita: 13M